April 1st is the deadline for California aircraft owners to submit their annual county aircraft property statements. However, it is still possible to file the 2019 Form 577 with the appropriate county assessor before May 7th without penalties. It is also possible to file an amended version of the 2019 Form 577 on or before May 7th if an aircraft owner believes it was not prepared correctly on the first filing.
California aircraft owners should have received an Aircraft Property Statement, Form 577, from the assessor in the county where their aircraft is habitually situated. Owners who did not receive a Form 577 should contact the county assessor or Aerlex Tax Services (ATS) for assistance.
The person or company that owns an aircraft on the official lien date of January 1st is responsible for the payment of the property tax bill on the aircraft for that year. It is often the case that aircraft that were purchased during the preceding calendar year – in this instance, 2018 – will not yet have been placed on a county’s unsecured property tax roll and, therefore, will have not received a Form 577 from the local assessor for the current fiscal year. However, that does not mean that the aircraft is not subject to tax or penalty for failure to file the Form 577. ATS can assist aircraft owners in identifying the correct county in which to file the Form 577 and can also assess the 2018 usage of the aircraft for potential reductions in the 2019 property tax bill. Conversely, aircraft owners who have sold an aircraft during the 2018 calendar year can contact ATS for assistance in removing their aircraft from the county’s unsecured roll so that they do not receive a property tax bill for the 2019 fiscal year.
An owner’s Form 577 submission is reviewed by the county assessor’s aircraft division, which calculates what the assessor believes to be the appropriate tax based on an assessed rate of approximately 1.25% of the aircraft’s fair market value. Owners have until August 31st to pay their property tax without penalty and until September 14th or November 30th, depending on the county, to file an appeal if they believe the assessor has placed too high of a valuation on their aircraft [Per Ms. Boladian, the September deadline is technically extended to Monday the 16th this year since the 15th falls on a Sunday, but she recommends filing by the 14th to avoid administrative confusion that often results when appeals are processed by the County Boards who fail to realize the deadline has been extended and mistakenly mark the appeal as untimely filed.] Failure to pay property taxes or file an appeal will result in penalties, interest, and, ultimately, liens. The county treasurer and tax collector can then levy on the aircraft, seize it and sell it at auction to satisfy the tax.
ATS tax specialist Vicky Boladian emphasizes that it is important for aircraft owners to carefully consider the information they report on the Form 577 before submitting this form to the county assessors and consult with knowledgeable tax advisors prior to filing. “I have repeatedly seen situations where the inaccurate completion of the Form 577 by an aircraft owner or management company caused the owner to incur tens of thousands of dollars of unnecessary and unwarranted property tax liability because they misunderstood the nature of the information requested.” Ms. Boladian further comments, “Many aircraft owners have their management companies fill out these forms and file them with the county without the review of an aviation tax advisor. Filing the form without a tax specialist’s assistance is a mistake that can result in a higher tax bill for the upcoming year than would have been necessary. The proper preparation of the Form 577 is a great first step to ensuring your property taxes for the upcoming fiscal year are as low as they can possibly be. The second step in the process is questioning the assessed value shown on the actual property tax bill received and filing an appeal if necessary.”
For more information regarding property taxes or Aerlex Tax Services please call 310-323-1500 or email Vicky Boladian at email@example.com.